Supply Chain Checkup: Watch Metal Production amid the COVID-19 Demand Collapse
The coronavirus pandemic has slowed nearly every part of the global economy -- and with it, commodity demand has fallen precipitously. Now more than ever, companies are monitoring the financial health of their entire supply chains. Best practices involve not only monitoring and keeping open lines of communication with your immediate Tier 1 suppliers, but also reviewing the suppliers of your suppliers, which are your Tier 2 and Tier 3 suppliers.
CreditRiskMonitor’s FRISK® score, 96%-accurate in predicting public company bankruptcy risk, serves as the first line of defense in identifying the weakest links along your supply chain. Tier 3 suppliers, such as metal producers, are presently falling on hard times and deserve a closer look as you prepare for and mitigate disruption. Professionals employed by more than 35% of the Fortune 1000 plus thousands of other large companies worldwide rely upon the FRISK® score to help make crucial risk management decisions at the appropriate time.
The Economic Backdrop
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Metal producers are one of the largest Tier 3 supplier groups worldwide. Since the beginning of 2020, the coronavirus has created an unprecedented demand rout, whereby key base metal categories, including aluminum, steel, and copper, have shown double-digit spot price declines. Notably, the largest importers of these commodities, the U.S. and China, are undergoing sharp economic contractions. That said, the pain is widespread with the Global Manufacturing PMI falling to 47.6 in April, the lowest level since the Global Financial Crisis.
CreditRiskMonitor is a financial news and analysis service designed to help professionals stay ahead of public company risk quickly, accurately and cost-effectively. More than 35% of the Fortune 1000, plus thousands more worldwide, rely on our commercial credit reporting and predictive risk analytics for assessing the financial stability of more than 57,000 global public companies.
At the core of CreditRiskMonitor’s service is its 96%-accurate FRISK® score, which is formulated to predict public company bankruptcy risk. One of four key components calculated in the FRISK® score is crowdsourced subscriber activity. This unique system tracks subscribers' patterns of research activity, capturing and aggregating the real-time concerns of what are essentially the key gatekeepers of corporate credit. Other features of CreditRiskMonitor’s service include timely news alerts, the Altman Z”-Score, agency ratings, financial ratios and trends. CreditRiskMonitor’s network of trade contributors provides more than $2 trillion on their counterparties every year, giving them visibility into their biggest dollar risks.